Credit Organizations Charged with Worsening the Recession

An 18-month investigation by the Senate Permanent Subcommittee on Investigations, led by Senator Carl Levin has revealed that credit organizations played a major role in worsening the economic downturn.

Credit rating agencies (CRAs) such as Moody’s Investors Service and Standard and Poor’s Ratings Services have been accused of grave irresponsibility and unethical practices. Several internal emails exchanged among the internal employees of these agencies show that the agencies were perfectly aware of the consequences of their actions. [Read more…]

California Approaches Court for Enforcing Subpoena Against Moody’s

Jerry Brown, the Attorney General of California, has said that he will take Moody’s Investment Service Inc., a New York based credit rating agency, to Court as the company is refusing to comply with the state subpoena.

The subpoena asks for certain documents needed for an inquiry into the company’s evaluation of mortgage backed securities, which were seen as a key reason behind the financial crisis. It is suspected that the company indirectly had a role to play in the crisis and the subsequent economic recession. [Read more…]

Moody’s Says US Credit Rating Under Threat

Credit ratings agency Moody’s has warned that the Aaa credit rating of top developed nations like the U.S., Germany, U.K., and Spain could be under threat as their deficits go out of control.

Moody’s has published a new report on the creditworthiness of these countries and has come out with a gloomy picture. Although it said that currently the ratings are stable and there is no immediate risk of downgrades, it warned that countries like the United States are much closer to downgrades now than they were before the financial crisis. [Read more…]